CHANCELLOR George Osborne has been told wind turbine firms are snubbing the North East because it is unable to offer any incentives.

CHANCELLOR George Osborne has been told wind turbine firms are snubbing the North East because it is unable to offer any incentives.

The boss of development agency One North East, Paul Callaghan, has raised concerns the vitally important offshore wind manufacturing industry is heading to Scotland and Europe because the region no longer has the money and influence to attract them.

One North East has played a vital role in attracting big-name firms to the banks of the River Tyne in particular, a success rate the coalition Government deemed insufficient when deciding to abolish the agency by 2012.

Mr Callaghan, speaking before MPs and business chiefs, said he was disappointed the region is now not able to further build on its success in bringing the likes of Clipper Windpower to Tyneside.

He said there should be three or four more major firms – with presumably thousands more jobs – on their way, but that a lack of incentives for them was preventing such investment.

A major investment announcement for Tyneside is due this week, but insiders say they fear this may be the last bit of good news for a while.

Mr Callaghan, also head of leading software firm Leighton, said: “We have no incentives now for One North East to offer. And yet the Scottish and other parts of Europe do have something to offer.

“These manufacturers will go to somewhere along the North Sea. If they do not come to the UK they will go to Germany or Scandinavia.

“What we see now is that we do not have the ability to attract these companies to the North East.

“There is the possibility of using the regional growth fund but, to be honest, compared to the amount that the agencies had before it is not enough.

“We are not as home and dry in offshore manufacturing as I would like to be. Manufacturers have said they are going to Europe and Scotland, and the hope that we had – that three or four major firms would be coming here – is looking much more difficult now because those firms are going elsewhere.”

One North East was able to offer cash for research projects and put in £200m into centres for excellence including Blyth’s National Renewable Energy Centre.

It also helped with finance from the now scrapped Grant for Business Investment scheme which in 2010 provided 156 companies with a total of £13.8m.

This alone is expected to created more than 1,500 jobs and protect a further 970, with £123m coming from private firms as a result. Mr Callaghan was last night backed by former regional minister Nick Brown, who warned that coalition decisions had seen the region lose its edge.

The Newcastle East MP said: “The Government should have kept One North East even in a slimmed down form because we need an experienced economic development team that can focus on big projects and make bids to the regional growth fund.

“If we had this backed by a specific minister this would have put us on a par with Northern Ireland, Scotland and Wales.”